Uncovering aspects of franchisees’ incentives: an explorative investigation

Abstract

The success of franchise systems is usually explained by referring to franchisees’ incentives, that is, residual claims to profit and empowerment through delegation. This paper focuses on possible psychological and social dimensions of franchisees’ incentives by investigating franchisees’ and employed managers’ self-efficacy, system commitment, and system conformity performance. In the explorative study, we found that franchisees were significantly more committed than employed managers, but we were not able to discover any differences between operational managers employed by franchisors and franchisees. This paper discusses various theoretical understandings of franchisees’ incentives and discusses possible explanations of how and why franchisees’ incentives affect their employed managers.